Sprint parent SoftBank is determined to turn around its troubled subsidiary according to the CEO of the Japanese giant. In a surprise appearance on a recent Sprint earnings call, Masayoshi Son, made it clear he is still dedicated to the U.S.’ No. 4 carrier, believing the company is still capable of a “historic turnaround.”
In recent days, Son extended Sprint CEO, Marcelo Claure’s contract through May 31, 2019. The contract also includes a chance to earn 10 million shares of Sprint stock. Claure has already made more than $22 million in his nine months on the job, with his current $1.5 million contract set to expire on Aug. 18.
The new deal requires Claure to give up pay raises and long-term incentive bonuses in favor of shorter-term bonuses. The deal also stipulates the Sprint CEO must more than double the company’s stock from its current $3.85 per share to $8.
The 10 million shares are meant to act as a “Turnaround Incentive Award Grant,” according to a Securities and Exchange Commission filing. The $8 value must take place “over any 150-day period during a four-year term from June 1, 2015, through May 31, 2019.”
Son admits Sprint needs a major network overhaul, but claims he doesn’t intend to give up on the company anytime soon. He said he’s been working for months with his 100 top network engineers seven nights per week from 10 p.m. to 2 a.m. to come up with a plan to fix Sprint, according to The Wall Street Journal .
The company is facing increased competition from T-Mobile US, which recently overtook the Overland Park, Kan.-based company for the No. 3 spot in the U.S. market. Sprint has been struggling since acquiring Nextel Communications in 2005, and has posted $50 billion dollars in losses since 2006.
Until recently, Son’s plan to turn Sprint around was to acquire T-Mobile US and merge it with the struggling carrier. Those plans are now on hold until at least after the 2016 election as the deal was dashed by regulators.
But it’s not all bad news for Sprint. In recent months, the company has seen some growth under Claure, adding high-revenue subscribers and improving its standing in national network comparisons.
